Outgoing Wipro CEO Delaporte 'found it tough to win hearts and minds of traditional Indian IT firm'

The new CEO Srinivas Pallia needs to nail down his plans quickly, give the firm renewed direction, and convince key stakeholders he is the right choice during perhaps the darkest period in Wipro’s history.
Thierry Delaporte.
Thierry Delaporte. (File Photo | PTI)

BENGALURU: When Thierry Delaporte was announced the CEO and MD of Wipro in July 2020, Rishad Premji, chairman, Wipro, had said that he would be the right person to lead the company in the next phase of growth. Delaporte had said, “I look forward to building a better tomorrow for all its stakeholders.”

Since 2020, the value of the company's stock and market capitalisation grew by 2.5X. But the Frenchman could not complete his five-year tenure and as Peter Bendor-Samuel, CEO of Everest Group, a research firm, puts it, "As a European, it was difficult to win the hearts and minds of a traditional Indian IT services firm and this undoubtedly also contributed to flagging morale."

Delaporte undertook a significant transformation of Wipro, investing in consulting, and reorganising and upgrading talent. His goal was to reorient Wipro from a firm mostly focused on providing services that reduced the cost of IT and tech services to one which focused on both costs take out and on creating value from technology and tech services. "This transformation was very broad-based as well as internally painful and was complicated by the fact that it was undertaken during the pandemic. The advent of Generative AI along with the post Covid and tech pull back has occurred whilst Wipro was in the middle of this transformation and has contributed to the poor performance relative to the rest of the industry that Wipro has experienced," he told TNIE.

Delaporte’s significant achievements in bringing new capabilities, and streamlining the organisation are balanced by slower growth, and below industry profit than other industry peer companies and continued execution issues with deteriorating morale. He is clearly leaving Wipro better positioned and with the start of a strong foundation, However, he will be disappointed not to have finished the transformation and got Wipro back to its old position as an industry leader, the CEO of Everest Group said.

In his mail, Delaporte said that he was proud of what they have achieved over the last four years, growing revenues by 35%. "We’ve generated 25% more profit in the last four years than in the previous 4-year period," he told employees. Also, he made 12 acquisitions.

The company is promoting its internal talent, and analysts say the new CEO Srinivas Pallia is a good bet.

Neeti Sharma, CEO, TeamLease Digital said, "With years of experience within the organisation, he will bring a strategic advantage in steering Wipro through the complexities of today's dynamic business environment. His appointment underscores the significance of cultivating talent from within and leveraging that familiarity to drive innovation, build stronger relationships and sustain long-term success."

Thierry Delaporte.
Wipro CEO Thierry Delaporte resigns, Srinivas Pallia to succeed him

Delaporte rarely left his Paris base

Phil Fersht, CEO of HFS Research, in a blog post said, "Sadly for Wipro, the post-pandemic period has been one of the worst times in the company’s history. Delaporte rarely left his Paris base, while his CEO counterparts have been regularly rallying the troops across India and the US. You can’t run an Indian-heritage business during tough economic times when you’re not physically present to boost morale and represent the firm. Being seen at Davos and not rallying the leadership while the revenues are tanking is not a good look.”

He added that the firm is bleeding talent, and morale has never been lower. The new CEO needs to nail down his plans quickly, give the firm renewed direction, and convince key stakeholders he is the right choice during perhaps the darkest period in Wipro’s history.

“In professional firms, the impact of organisational culture on their operations is significant. Often, unless there's a specific skill gap, an internal candidate is better suited to lead the organisation due to their understanding of this culture," said Arvind Pandit, Founder & Managing Partner, Ishwa Consulting.

Bendor-Samuel said that the new CEO's biggest challenge in the immediate future is the poor tech and tech services macro environment. "Fortunately for him, he will have at least a year of honeymoon, with the investors likely to give him some time. It is likely that by that time the macro will be turning around. As a long-time Wipro person of over 30 years, he is well positioned to be able to address the moral issues and should receive significant internal support.”

“His longer-term issues will be to continue the transformation Thierry started. He will need to continue to add new capabilities, add to the talent and run a lean focused firm," he added.

This transformation will not come cheap and if Wipro is to successfully reposition itself as a leader in this new market, it will need above market investments over several years and will likely need to keep profit margins below industry norms until this transformation is finished, Bendor-Samuel added.

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